Whats a reasonable fee to pay someone for book keeping annually, per property?

[bhodgkiss]

Hi all

I have a couple of BTLs

Whats the going rate to pay someone annually to do the book keeping per property please?
So I mean collating all costs, receipts, working out whats an allowable expense and producing the summary (in Excel or similar) as a basis for the annual tax return

Thanks

[jpkeates]

I do my own bookkeeping and my accountant charges a couple of hundred quid for a return based on my figures.

[MdeB]

Hi all

I have a couple of BTLs

Whats the going rate to pay someone annually to do the book keeping per property please?
So I mean collating all costs, receipts, working out whats an allowable expense and producing the summary (in Excel or similar) as a basis for the annual tax return

Thanks

How long is a piece of string?

Do you want an accountant, or just someone to put in the numbers and come up with figures for your tax return?

Do you want it done on cash basis or accruals basis?

How many receipts will you have each year?
How will this vary by year?

Do you want them to have liability if they get the figures wrong and the tax man chases you?

Do you want it by property, or just the overall position?

Are all expenses attributable to a specific property (not all mine are)?


Personally, I use a spreadsheet for my property book keeping (double entry, accruals basis) for 3 properties because I am a skinflint, but I'm getting to the stage where I think that using a property-accounting package would be better (especially with Making Tax Digital in the offing).
I spend time each month (say 1 hour) putting in income and expenditure items as this gives me a warm feeling (or otherwise) about how each property is doing.
I then spend 20 hours or so doing 'end of year' things to get the figures for tax return and spreadsheet ready for next year (this would all be 'at the press of a button' if I used a software package, but there would be time required to configure the package)

[emwithme]

Do you want it done on cash basis or accruals basis?

It doesn't matter how you WANT it done. Property income is assessed on an accruals basis.

If you want someone to do it month by month, depending on the complexity/how many receipts you have/where in the country you are/how they are qualified and then produce and submit your return, possibly £25 to £50 per month. If you want someone to confirm your figures are "correct" (ie taking figures you've put on to a spreadsheet and saying "you can't claim for X so I've taken that off, and you can claim for Y but I don't see anything for that, do you have any Y-related expenses") and then producing a tax return, probably around £250.

You won't (probably) need a Chartered Accountant (unless your tax affairs are VERY complicated) but you could try an AAT Licensed Bookkeeper - they are fully qualified, have the required insurances and regulation (in case anything does go wrong).

Disclaimer: I am currently studying the AAT Accountancy Qualification but am not yet fully qualified...give me three months and hopefully things will be different!

[MdeB]

It doesn't matter how you WANT it done. Property income is assessed on an accruals basis.

It was my understanding that
a) for rental income (before expenses) less than £10,000 HMRC currently allows cash basis.
b) HMRC are considering increasing that to the VAT threshold.

But I am here to learn and be corrected.

[Gordon999]

If your properties are under personal name, you can use cash basis recording on rental income up to 150K pounds threshold.

https://www.gov.uk/government/consul...rty-businesses

[bhodgkiss]

Many thanks

So i submit the return and am liable for its accuracy, but someone else (my partner) does the upkeep throughout the year and put its in a presentable fashion for me to review and submit.
I was thinking £25 a month per property based on a couple of hours work a month.
Also why would cash vs accrual basis make any difference to how much time needs to be spent on book keeping? I cant see it affects it much?

[MdeB]

If your properties are under personal name, you can use cash basis recording on rental income up to 150K pounds threshold.

https://www.gov.uk/government/consul...rty-businesses

That link is to the results of a consultation where the recommendation is that the £150K limit be applied.

Changes to implement that recommendation were in the Finance Bill, but were dropped when the election was called and did not make it into the Finance Act 2016.

There is currently a "non-statutory concession" in PIM1101 (at https://www.gov.uk/hmrc-internal-man...manual/pim1101) that allows the use of cash basis if total receipts for the year are £15000 or less.
PIM1101 also says that accruals basis must be used if receipts are over £15000 and may be used if less.

[MdeB]

Also why would cash vs accrual basis make any difference to how much time needs to be spent on book keeping? I cant see it affects it much?

Accruals basis requires that apportionments be made on each income and expenditure account at the end of the tax year (and probably each 3-month period when Making Tax Digital comes in for property businesses). Those need to be calculated and the appropriate amount allocated to each tax year.
Affected accounts include rent, insurance, repairs, mortgage interest, and membership of RLA, NLA, etc.

[bhodgkiss]

Many thanks
Yes of course, so you simply calculate everything based on tax year dates, which is what I currently do. A bit of a faff to divide up various costs which are monthly are annual, but pretty straight forward.

[Gordon999]

It is not difficult to keep records for 1 or 2 BTL properties if your rent is received on monthly basis .

One way to keep track is to show the information on a table ( or spreadsheet ) having about 7-8 Vertical Columns and 15 lines Across .

The column headings can be :

C1. Month
C2. Rent Due
C3 Rent paid to Bank

C4 . GR, Insurance & Council Tax
C5 . Maintenance Cost
C6 Mortgage Interest
C7 Letting agent fees
C8 - Miscellaneous Costs .

Under Col 1, on each line going down , enter the month from April to March

Under March box , enter Total .